Xero vs Paylocity
A head-to-head comparison to help you pick the right tool
Last updated: April 30, 2026
Xero
Xero is a cloud-based accounting platform popular with small businesses and accountants worldwide. It is known for its clean interface, strong bank reconciliation tools, and excellent integration ecosystem. Xero is particularly popular in Australia, New Zealand, and the UK, and is considered the main alternative to QuickBooks for cloud-based accounting.
Paylocity
Paylocity is a modern HR and payroll platform designed for mid-market businesses. It combines payroll processing with employee engagement tools, learning management, and workforce analytics. Paylocity stands out for its strong mobile experience and focus on building connected, engaged workplaces.
Pros
- ✓Beautiful and intuitive interface — one of the cleanest in accounting software
- ✓Unlimited users on all plans — no per-seat pricing
- ✓Excellent bank reconciliation with smart matching
- ✓Strong ecosystem of 1000+ integrations
Cons
- ✗Payroll requires a separate add-on in most regions
- ✗Inventory management is basic compared to QuickBooks
- ✗Reporting is less comprehensive than QuickBooks on lower tiers
- ✗Customer support is primarily online with no phone support
Pros
- ✓Strong employee engagement and communication tools
- ✓Excellent mobile app for both managers and employees
- ✓Modern UI with good user adoption rates
- ✓Robust payroll with strong compliance features
Cons
- ✗Pricing requires a sales call and is not published online
- ✗Implementation can be complex for larger organizations
- ✗Some advanced features require additional modules at extra cost
Xero vs Paylocity: Side by Side
| Factor | Xero | Paylocity |
|---|---|---|
| User Rating | N/A | N/A |
| Category | Accounting Software | HR Software |
| Pricing Model | Paid | Paid |
| Starting Price | $15/mo | Custom pricing |
| Best For | Small businesses and accountants wanting a clean, modern alternative to QuickBooks | Mid-market businesses with 20-1000 employees |
| Our Pick | — | — |
Xero Features
- ✓Bookkeeping
- ✓invoicing
- ✓bank reconciliation
- ✓expense claims
- ✓payroll
- ✓financial reporting
- ✓inventory
- ✓project tracking
- ✓integrations
- ✓mobile app
Paylocity Features
- ✓Payroll
- ✓benefits
- ✓talent management
- ✓workforce management
- ✓analytics
- ✓employee self-service
Pricing Comparison
Our Take
Choose Xero if small businesses and accountants wanting a clean, modern alternative to quickbooks. Choose Paylocity if mid-market businesses with 20-1000 employees.
Best For
Small businesses and accountants wanting a clean, modern alternative to QuickBooks
Best For
Mid-market businesses with 20-1000 employees
Also Consider
If neither Xero nor Paylocity is the right fit, Dext is worth evaluating.
Dext
Bookkeepers, accountants, and businesses with high receipt volumes wanting to eliminate manual data entry
From $15/mo
Frequently Asked Questions
What is the difference between Xero and Paylocity?
Xero is best for small businesses and accountants wanting a clean, modern alternative to quickbooks. Paylocity is best for mid-market businesses with 20-1000 employees.
Which is better, Xero or Paylocity?
Choose Xero if small businesses and accountants wanting a clean, modern alternative to quickbooks. Choose Paylocity if mid-market businesses with 20-1000 employees.
How much does Xero cost?
Xero starts at $15/mo. Pricing model: Paid.
How much does Paylocity cost?
Paylocity starts at Custom pricing. Pricing model: Paid.
Who should use Xero?
Small businesses and accountants wanting a clean, modern alternative to QuickBooks
Who should use Paylocity?
Mid-market businesses with 20-1000 employees